Until this week, the nationalization bears had all of the cards, for one simple reason -- the banks had taken off the table any reason to believe they could survive. Put simply, the banks had all become GM (NYSE: GM) (Cramer's Take): bloated unprofitable companies that have no hope of turning around that need to be euthanized and taken over.

That changed the moment they said they were profitable. If that's the case, then by all means the government should find ways to forebear as the profits build up so the charges can be taken. I have said a gazillion times if we don't put them out of business and we don't liquidate them, the yield curve will kick in and make them money. If you don't force their 90%-paying portfolios to be equal in worth to the 10% that is hurting, then you can come out of this with the banking system intact. If the president doesn't set a populist tone that destroys them, it can happen. If the SEC decides to roll back the weapons of mass destruction, they can allow them to lift and raise capital to pay back the government and change the pattern of endless losses.

I want to be clear here: There is no other reason for us to rally other than a decline in the pace of the decline in tech and retail because of the end of the inventory overhang. The endless spiral of bad news, though, has been broken, and once hedge funds think that mutual funds think it is OK to plunge back in the water, they will panic and come in with billions blazing, especially because their performance as a whole is better than the market -- courtesy of the shorting of banks -- and they will have to cover and go long.

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.